Masternode Basics

What is a masternode, why invest in one, and which ones are best to invest in?

Masternodes are an essential part of the infrastructure of certain crypto currencies. They offer financial yield, much like GPU or ASIC mining can. This yield is determined by the underlying crypto currency. Masternodes earn this yield because they provide services to the cryptocurrency infrastructure, again, a lot like mining, but in a significantly different way.

Today the main role of masternodes is to send coins anonymously and instantly in addition to providing consensus. These services add value to the users by increasing total network bandwidth, creating more security for the masternode network, and decentralising the node network.

In the near future, masternode systems will evolve beyond just DaskSend and Instant send. For example, nodes can be used to host decentralised applications, or enable trustless exchange services.

Note: investing in masternodes is highly speculative and, as with various cryptocurrency trades or exchanges, you can potentially lose all the money that you invest and then some.

For example; the market cap of every combined cryptocurrency is $359 Billion USD (April 2018) while Apple Computer alone is worth $898 Billion. Cryptocurrency is still young and sudden changes have proven to be wild and unpredictable.

If a whale (someone with a lot of money invested, or "heavy bags") decides to dump their coins, the price collapses.

On the other hand, if the Duke of Westminster (who is in his 20's, and possibly appreciates blockchain technology) takes a liking to a particular coin it means the next stop is "to the moon”.

Speculating in micro-cap masternode cryptocurrency or blockchains that have no dedicated development team or a credible roadmap is a sure way to lose your money.

Ask yourself:

  • Do you, the investor, have knowledge on cryptocurrencies?
  • What is your level of technical expertise?
  • Are you ready to read the white paper, and dig through all available about the coin?
  • Is the coin just a vehicle for speculation?
  • Does it offer a useful service which is in demand today?
  • Will that service be in demand in the future?
  • Can the coin evolve around regulatory challenges?
  • Is there a precedent for that yet, as outlined by the SEC, CFTC, FinCEN- or your national government?
  • How does it fare against competition from other cryptos or traditional organizations offering the same services?
  • (remember, newer isn't always better)
  • Beware of FOMO (fear of losing out) syndrome, is the investor ready to think the decision over for a day, a week, a month?

Masternode investing is not for "weak hands".

A Dash node, at the time of writing, costs $80,640 (It was over $1,493,590 at it's all-time-high).

​​​​​​​Several of these coins are creating brand and tech value behind the scenes. Is it worth investing in them? – It kind of depends on whether they will still be around in the next several years- and if you can determine whether or not these coins offer any real utility today. (we try not to endorse any single coin, but you might decide one is right for you)

Here's a playlist about our top picks for masternode coins, as well as instructional videos on setting up the required technology to run your own masternode!